Being able to envision what a new product or the next product version should look like and do is essential for getting there. This post discusses creating a vision and product strategy and iteratively validating the strategy to align everyone involved in the development effort and to maximise your chances of creating a successful product.
Two Common Mistakes: Big Upfront Research and No Prep Work
Being able to envision what a new product or the next product version should look like and do is essential for getting there. Traditionally, organisations tend to carry out extensive upfront market research, product planning, and business analysis activities resulting in a product concept or a market requirements specification. Some fall into the other extreme: They rush into development without having carefully thought about the product’s target market and its value proposition.
Neither of these two approaches is desirable. The first one ignores the likelihood of change. It assumes that customer needs and how they are best met can be correctly predicted upfront rather than viewing flux and unpredictability as dominant factors in software development. The latter leaves the team without a common goal making it virtually impossible to understand what it takes to develop a successful product. This post discusses creating a vision and product strategy and iteratively validating the strategy to maximise your chances of creating a successful product.
Product Vision and Strategy
What’s the alternative to the two approaches described above? I find it helpful to keep things simple and focus on two artefacts that should be available before starting development starts: vision and product strategy.
A vision describes the purpose of a product, its overarching goal, the positive change it should create. Say we want to develop an app that helps people become more aware of what they eat, then the product vision might be “helping people eat healthily”.
An effective product strategy describes the path chosen to realise the vision, and it should answer the following questions:
- Who is going to use the product? Who are its target users? Is anybody going to buy the product? If so, who are the target customers?
- Which needs will the product address? What value does the product add? Which problem will it address, or which benefit will it provide?
- Which product attributes are critical for meeting the needs selected and therefore for the success of the product? What will the product roughly look like and do? In which areas is the product going to excel?
- How does the product compare against existing products, from both competitors and the same company? What are the product’s unique selling points? What is its target price?
- How will the company make money from selling the product? What are the sources of revenue and what is the business model?
- Is the product feasible? Can the company develop and offer the product?
After you have created a vision and an initial product strategy, you should systematically identify and address the key risks contained in your strategy in order to maximise the chances of releasing a successful product. A great way to do this is to iteratively test and correct the product strategy following the process shown in the picture below. (The process is based on Eric Ries’ work).
Start by selecting the biggest risk: the uncertainty that must be addressed now so that you don’t take the product in the wrong direction and experience late failure—that is, figuring out at a late stage that you are building a product that nobody really wants or needs. For example, the need for your product might not be strong enough, the segment you’ve chosen might not be right, or the technologies might not be feasible.
Next, determine how you can best address the risk, for instance, by observing target users, interviewing customers, or employing a minimum viable product (MVP). Carry out the necessary work and collect the relevant feedback or data, preferably together with the development team and other key stakeholders.
Then analyse the results and use the newly gained insights to decide if you should pivot, persevere, or stop—if you should stick with your strategy, change it, or no longer pursue your vision—and take the appropriate actions accordingly. Follow this process until no crucial risks are left, you are confident that your strategy is correct, and you have enough evidence to support it—or until you have run out of time and money.
Iteratively reworking the product strategy encourages you to carry out just enough market research just in time to avoid too much or too little research. It also suggests a risk-driven approach—addressing the biggest risks first so that you can quickly understand which parts of your strategy are working and which are not, thus avoiding late failure. As you iterate your strategy, you should see its uncertainty decrease; fewer and fewer risks should be present, and the contents should become clearer and more refined.